SCL’s New Take on the Delay and Disruption Protocol

Written by Gabriel Mulero Clas

In June of this year, the Society of Records and Programmes

Construction Law (“SCL”) sent its members In general, the 2016 Draft is focused on providing,
a draft of the second edition of its widely “practical and principled guidance on
recognised Delay and Disruption Protocol.1 proportionate measures […] in relation to all
It follows the publication of a Rider projects, regardless of complexity or scale.” 2 It
published late last year about which this offers the user options to respond to certain issues
author wrote a previous article. Although and makes specific recommendations wherever
the “2016 Draft” is meant to be possible. This is especially prevalent in the
consultatory, there are a number of
robustness of the updated guidance on records and
improvements from the “2002 Edition” programming in Section 2.
worth exploring before the final and
definitive version is published sometime in Clear Agreement
the future. There have been many changes The first notable improvement in Section 2 is that it
not all of which will be covered in this recommends, “clear agreement on the type of
article and, in any case, I will only focus on records that should be kept […] prior to the time
changes other than those already included [the parties] enter into the contract (or at least at
in the Rider. the outset of the works).”3 It recommends a
Structure proportionate and adequate approach to this
agreement and spells out several guidelines, 4
The first thing to notice is that the draft is including, among others:
organised differently from the 2002 Edition. The
table below is a broad strokes cross-reference a) agreeing on responsibilities for production and
between the two versions. Please note that it is not checks;
a perfect cross-reference since most topics have b) agreeing on format;
been amended, expanded or moved.
c) agreeing on ownership;
2002 2016 Guidance
Edition Draft d) establishing record keeping requirements prior
to preparing the tender documents to allow
- 1 Meaning of delay, disruption accurate pricing from tenderers;
and acceleration
2 2 Records and programmes e) the contemporaneous generation of records
relevant to delay and disruption events;
1 3 Delay, disruption and
acceleration f) that certain types of records should contain
1.15; 4 Other financial heads of facts only and offer no opinions;
1.16; 1.20 claim g) the need to update records as necessary;
3 5 Extensions of time during
h) the need to maintain records for an appropriate
the course of the project
amount of time; and
4 6 Delay analyses time-distant
from the delay event i) maintaining a collaborative document
1.19 7 Dealing with disruption management system database.
claims

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These guidelines aim to deter disputes over the delivery, testing and commissioning, etc.) and
level of record-keeping and to reduce uncertainty seven different types of explanatory records that
when discussing an EoT. Whereas it falls short of “explain in words, graphics, and spreadsheets key
recommending the use of Building Information considerations and assumptions underpinning the
Modelling (“BIM”) processes, it expressly programmes,”6 such as narratives, progress curves,
recognises its growing use and recommends marked-up drawings and sketches, BIM files, etc.
specific agreement regarding its content, use and Loss of Profits and Unabsorbed Overheads
ownership if such processes are adopted.
Another notable improvement is the cost records
Documentation
guidance about loss of profits and unabsorbed head
Regarding programmes, little has changed other office overheads.7 In general terms, cost records
than a re-organisation of the section to make it should have enough detail to be able to link costs
more straightforward. With that said, the drafters with delay or disruption events. However, when
have added new guidelines such as5: considering loss of profits and unabsorbed head
office overheads, even when the Contractor uses a
a) the use of supplemental tools when works are
output driven; formula, it still needs to disclose certain
information – to substantiate his claim – that it
b) the incorporation of narratives to link may not want to disclose, such as company
programmes with method statements; accounts, tendering history, business plans, etc.
c) the Contract Administrator to specify the The 2016 Draft therefore proposes the agreement
contractual requirements a proposed of “relevant rates in the contract,” for example,
programme or update does not meet before “staff rates to be charged in the event of an
labelling it as inadequate (as opposed to just Employer Delay to Completion”.8
giving reasons); A clause setting such rates may be construed as a
d) saving updated programmes in native format as ‘Brown clause’ for liquidated prolongation costs.
opposed to PDF; and This is a clause that fixes a daily or weekly rate to
compensate the Contractor for prolongation costs
e) that asking the Contractor to propose ways to caused by Employer delays.9 This concept is not
mend delays is not the same as an instruction to new to the Protocol10 but its application to loss of
accelerate at the Employer’s cost. profit and arguably head office overheads for
In addition to programmes, there are also progress Employer Delay to Completion is.
records, resource records, cost records, When developing such a clause, drafters must have
correspondence and administration records (e.g., two thoughts in mind. The first is that the
instructions, notices, variations, bonds, technical Contractor may not be able to obtain liquidated
documents, milestone documents and claims, etc.) relief for loss of profit or unabsorbed head office
and, contract and tender documents. Each one of overheads for mere Employer Delays to Progress.11
these six categories and sub-categories of Only when the Employer causes Delay to
documents has its own description, requirements Completion would the Contractor be able to obtain
and raison d'être. relief on these heads of claim.12 The second,
Both Section 2 and Appendix C of the 2016 Draft applicable in England, is whether it complies with
enter into considerable detail in explaining each the most recent case on liquidated damages:
category of record. For example, Appendix B lists Cavendish Square Holding BV v Talal El
seven different types or stages of the programme Makdessi; ParkingEye Ltd v Beavis.13 To
(e.g., tender programme, proposed programme, withstand the test in this case, drafters must ensure
accepted programme, etc.), seven different that the rates they set are not “out of all proportion”
supplemental detailed programmes (e.g., design, from the legitimate interest in enforcing the

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Employer’s obligation not to prevent the Contractor in this example, the SCL is referring only to
from performing its obligations to get on with the concurrent delay that occurs after the contract
work. completion date. Also, an Employer Delay that
Concurrent Delay occurs during a period of project overrun caused by
a previous Contractor Delay is not concurrency.
One of the most important changes in the
Substance of the apparent recommendation
Protocol’s approach comes in its new treatment of
concurrent delay at Section 3.10. In this author’s However, the most important aspect of the example
opinion, however, the SCL’s approach may be in Section 3.10.7 is the recommendation that
controversial for reasons of both form and follows in Sections 3.10.9 and 3.10.10, which states
substance. that the Contractor should not obtain an EoT
Ambiguity in the text and structure of the Section because, in the example, the Employer Delay occurs
within a period of Contractor Delay. That is, if the
The general rule was clear in the 2002 Edition. It Contractor Delay starts before the Employer Delay
recommended that, when met with concurrent and finishes after, then the Contractor should not
delay, the Contractor should be entitled to an EoT obtain an EoT for that period of Employer Delay.
for Employer Delays to Completion. The Protocol The 2016 Draft reasons that, in these
reiterated the rule when discussing the specific circumstances, “the only effective cause of Delay to
scenarios of ‘true concurrency’ and what used to be Completion is the Contractor Risk Event,” 15 so that
called ‘concurrent effect’. “[c]oncurrent delay only arises where the
Whereas the general rule remains as a Core Employer Risk Event is shown to have caused
Principle in the 2016 Draft,14 it also includes an Delay to Completion or, in other words, caused
exception to the general rule which starts with the critical delay (i.e. it is on the longest path) to
example in Section 3.10.7: completion.” 16

“[…] a Contractor Risk Event will result in The first question that this reasoning raises is that,
five weeks Delay to Completion, delaying if there is only one effective cause of delay, would
the contract completion date from 21 there be any concurrency? The straightforward
January to 25 February. Independently answer, which is actually provided by the 2016
and a few weeks later, a variation is Draft itself,17 is: no. However, this logic simply
instructed on behalf of the Employer which, favours whichever delay comes first and takes no
in the absence of the preceding Contractor account of various concerns raised throughout the
Risk Event, would result in Delay to years such as “causative potency”18 and the
Completion from 6 February to 20 prevention principle discussed in further detail
February.” below.19

At first instance, it is not clear whether the periods Leaving the discussion about ‘effective cause’ aside,
the example mentions relate to risk events, periods this reasoning can very easily be applied to
of delay or periods of project overrun. In this situations both pre and post completion date. If
author’s opinion, the way to interpret the example that is indeed the case, the SCL is suggesting that
without running into incongruities is by assuming concurrency can never happen if the Contractor
that the variation works performed in February Delay starts earlier and is longer than the Employer
constitute also the Employer’s period of delay. In Delay. The Contractor would only obtain an EoT (1)
addition, the period of project overrun from 21 when the Employer Delay ends after the end of the
January to 25 February must also constitute the Contractor Delay, and (2) when the Employer
period of Contractor Delay. This means that both Delay occurs within the Contractor Delay but adds
periods of delay happen after the original contract to the already existing Contractor Delay, thereby
completion date, which gives the impression that, extending the date of completion beyond the

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project overrun caused by the Contractor. However, completed later than would otherwise have been
neither of these describe a situation of concurrent the case because the works were already going to
delay anyway because the Employer Delay would be be delayed by a greater period because of the
extra. Contractor Delay to Completion.” 25 In other
It may be that the SCL’s new proposed words, ‘but for’ the Employer Delay, would the
recommendation is intended to assess whether it is Contractor still be delayed? For the 2016 Draft, the
fair and reasonable to grant an EoT to a Contractor answer is yes. Therefore, there is no concurrency.
for a post completion Employer Delay that could However, if applied consistently to any situation of
have been avoided had the Contractor finished on concurrent delay, including ‘true concurrency’, this
time. A useful example that helps illustrate this reasoning would result in the end of concurrency as
assessment is inclement weather (i.e., we know it because it is always the case in
“exceptionally adverse climatic conditions” in concurrency that without the Employer Delay, the
works would already be delayed by the Contractor
FIDIC nomenclature) where the cause of delay is
neutral. As a matter of FIDIC standard form Delay to Completion. This is because both delays
interpretation, the Contractor would be due an EoT are considered critical hence why they are
for this event under Sub-clause 8.4. In obiter concurrent.
dictum, Colman J asked in Balfour Beatty v The problem with this reasoning is that the
Chestermount20 this same question, whether it opposite is also true: ‘but for’ the Contractor Delay,
would be fair and reasonable to grant an EoT for a the project would still be delayed for the period of
relevant event that would have been “wholly delay caused by the Employer. If each of the
avoided had the contractor completed the works” Employer and Contractor Delays are by this logic
on time. Coleman J uses the example of a storm effective causes of delay on their own so that each
during a period of project overrun. Therefore, it lies on the critical path, concurrency is undeniable.
appears that this exception would only apply in When both delay periods sit on the critical path, a
situations where the delay is a non-compensable project is delayed in the absence of either delay due
Employer Risk Event.21 This was the to the existence of the other. For example, ‘but for’
recommendation that the SCL gave in the 2002 lack of access to site, the works are still delayed due
Edition.22 to slow mobilisation. The opposite is also true.
Therefore, if the Employer Delay would extend the
However, the example in the 2016 Draft is a
date of completion despite the Contractor Delay,
variation and, giving the Employer a ‘blank check’
even if it is by a shorter time, then the Employer
to instruct variations during a period of Contractor
cannot simply obtain a windfall for causing critical
Delay or, in any event, after the original contract
delay and effectively helping prevent the project
completion date, amounts to a windfall that does
from completing on time.
not respond to any consideration of fairness or
reasonableness. Furthermore, it has been asked 23 Finally, the recommendation does not hold its
how Balfour Beatty v Chestermount could survive ground against the prevention principle. It would
if Colman J had started from the premise that no be against the principle to give the Employer a
EoT would be granted in situations of an Employer windfall in circumstances where he has effectively
Delay occurring during a period of Contractor contributed in preventing the Contractor from
Delay because that was precisely the situation he completing the project on time. When holding that
was considering in deciding that an EoT would be apportionment does not reflect English law,
calculated on a ‘net’ basis. Akenhead J stated in Walter Lilly v Mackay26 that:
In addition, the ‘but for’ justification at the heart of “Part of the logic […] is that many of the Relevant
the 2016 Draft’s recommendation24 only takes Events [i.e., Employer Risk Events] would
account of one side of the equation. It says, “[…] the otherwise amount to acts of prevention and that it
Employer Delay will not result in the works being would be wrong in principle to construe [the EoT

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clause] on the basis that the Contractor should be specific studies such as the measured mile – which
denied a full extension of time in those keeps its title as the recommended method –
circumstances.” earned value and programme analyses, work or
He then stated that nothing suggested that an EoT trade sampling and system dynamics modelling; (2)
should be reduced in case of concurrent delay. project-comparison studies; and (3) industry
Although he was referring to City Inn 27 type studies.32 For cost-based methods, only estimated v
apportionment, what the SCL is effectively incurred cost and estimated v used labour are
suggesting is to ignore the prevention principle mentioned.33
altogether and “apportion” all of the risk to the Vocabulary
Contractor just because the Employer’s delay is
One of the most useful contributions of the 2002
shorter even though it could very well be an
Edition was that it provided the industry with a
effective cause of delay.
vocabulary with which to discuss precisely these
Whereas it is the SCL’s prerogative to recommend types of complex and divisive issues. It has already
what it considers preferable, this author hopes that been mentioned how the 2016 Draft has discarded
the discussion about the way in which the the use of the term ‘concurrent effect’34 even though
recommendation is drafted and justified continues. the existence of the concept is still acknowledged.35
The practical implications of a recommendation However, the use of an Appendix36 to compile a list
that swims so forcefully against the current could of definitions and glossary has not been
result in an increase of unnecessary disputes. abandoned.
Disruption There are six new terms in the Appendix: two of
them relate to programming, i.e., ‘level of effort’
Finally, another area where the 2016 Draft has
and ‘programme narrative’; two more relate to
excelled is in Disruption Analysis, now with its own
delay analysis, i.e., ‘as-planned versus as-built
Section.28 This special treatment reflects its status
windows’ and ‘time slice analysis’; and the last one
as a squarely separate albeit related concept in need
is ‘disruption event’. However, some new terms
of its own discussion and set of recommendations.
appear elsewhere such as those used to describe
The objective of disruption analysis is to
previously unrecognised types of delay analysis,
demonstrate productivity loss in the execution of
e.g., time slice windows analysis, longest path
work activities in either labour or plant in order to
analysis and earned value analysis. In addition, the
claim the loss and expense caused by the Employer-
enhancement of certain sections such as the
triggered disruption.29 The quantum is the
aforementioned records and programmes section
“difference between realistic and achievable
and the disruption section, together with the
productivity and that which was actually achieved
section regarding delay analysis time-distant from
in carrying out the impacted work activities”.30
the delay event discussed in this author’s previous
However, the real upgrade comes with the list of article on the Rider, will surely help frame the delay
disruption analysis methods, their straightforward and disruption discussion for years to come.
explanations and how they are compared with each
other. In addition, their preference is dictated by Conclusion
their order in the list from most recommended Whereas the 2016 Consultation Draft of the
option to the least. Second Edition of the SCL’s Delay and
Disruption Protocol includes some very
There are two groups of methods: (1) productivity-
welcome enhancements, there are other
based methods measure loss of productivity in
areas in which there is still room for
resources before the loss is priced and (2) cost-
improvement.
based methods measures the difference in actual
versus planned cost first.31 For productivity-based
methods, the 2016 Draft explores: (1) project

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1 SCL’s 2016 Consultation Draft of the Delay and Disruption 24 Sections 3.10.9 and 3.10.10, page 28.
Protocol (“2016 Draft”).
25 2016 Draft at Section 3.10.9, page 28.
2 2016 Draft at paragraph A of Introduction, page 1.
26 [2012] EWHC 1773 (TCC) at paragraph 370.
3 2016 Draft at Core Principle 1, page 5 and Section 2.5, page 12.
27 City Inn Limited v Shepherd Construction Limited, [2010]
4 2016 Draft at Section 2.5, page 12. CSIH 68.

5 2016 Draft at Sections 2.51, 2.53, 2.58, 2.61 and 2.65 at pages 19 28 2016 Draft at Section 7, pages 50 to 56.
to 21.
29 2016 Draft at Section 7.6, pages 50 and 51.
6 2016 Draft at Appendix B, Section 1.4, page 71.
30 2016 Draft at Section 7.9, page 51.
7 2016 Draft at Section 2.29, page 15.
31 2016 Draft at Section 7.12, page 52.
8 2016 Draft at Section 2.30, page 16.
32 2016 Draft at Section 7.16 - 7.20, pages 53 to 55.
9 See Chappell, David, et al, Building Law Encyclopaedia (2009),
33 2016 Draft at Section 7.21 - 7.24, pages 55 and 56.
page 330.
34 2002 Edition at Section 1.4.6, page 16.
10 2002 Edition at Section 1.8.5, page 21.
35 2016 Draft at Section 3.10.4, page 27.
11]See Chappell, David, et al, Building Law Encyclopaedia (2009),
page 330. 36 2016 Draft at Appendix A, page 59.

12 See Pickavance, Keith, Delay and Disruption in Construction

Contracts (2010) Fourth Edition, paragraph 21-017. Article Author
13 [2015] UKSC 67. For further commentary on this case, see Gabriel Mulero Clas
Mangan, Steve, The Highest UK Court Reviews The Law On
Penalties (24/05/2016)
Reviewslawonpenalties/SM/2016(5)/1/CLAL.

14 2016 Draft at Core Principle 9, page 6 and Section 3.10, page 26.

15 2016 Draft at Section 3.10.9, page 28.

16 2016 Draft at Section 3.10.10, page 28. Email: [email protected]

17 2016 Draft at Section 3.10.10, page 28.

18 See Marrin QC, John, Concurrent Delay (2002) 18 Const LJ No.

6 436.

19 Walter Lilly v Mackay [2012] EWHC 1773 (TCC) at paragraph

370.

20 62 B.L.R. 1, at 34 and 35; 32 Con. L.R. 139; (1993) 9 Const. L.J.

117.

21 See Sherman, Henry, The SCL Protocol and concurrent delay

(23 July 2003) (http://www.cms-
lawnow.com/ealerts/2003/07/the-scl-protocol-and-concurrent-
delay).

22 Section 1.4.8.

23 See Sherman, ibid.

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